Room to Maneuver

[READY]

Open-d,
Based upon my experience here is my suggestion since you are looking for a rule of thumb. This would apply to most production boats.

The starting point is not what is the list price of this single boat but what is average list price of comparable boats.that is the competition to the seller and the alternative for the buyer. Comparable ideally means same model, similarly equipped, similar condition and within the same region. Using Florida pricing for a SoCal boat is not comparable unless you adjust for the cost,risk and time to deliver it.
Offer 20% off an be prepared to negotiate.
Option#2
Decide what is the max you will pay for the boat (and feel it was a fair deal) and offer 10-15%% less and negotiate from there.

In any event I have usually included a "deductible allowance" for survey items to let the seller know I am not planning to nickel and dime them. For example on an $800k boat buyer would cover any problems found at survey totalling less than $30k. So even if the offer is aggressively low it will not get even worse for the seller after the survey unless there are really serious problems.

All of this is influenced by how badly you want the boat and how anxious the seller is to get rid of it. As mentioned if you do your homework and have a good broker you can usually know about where the parties are likely to meet on price.

 

[PPandE]

Open-d
My best advice to anyone that wants to buy a boat is to first find a broker that you can work with. If your broker is familiar with the type of boat you want, he can easily tell what a "fair" price is for the one you're considering and offer counsel concerning any offer.

 

[Open-d]

Open-d
My best advice to anyone that wants to buy a boat is to first find a broker that you can work with. If your broker is familiar with the type of boat you want, he can easily tell what a "fair" price is for the one you're considering and offer counsel concerning any offer.

Is it common for a buyer to use a broker, as well as the seller?

 

[Open-d]

Open-d,
Based upon my experience here is my suggestion since you are looking for a rule of thumb. This would apply to most production boats.

The starting point is not what is the list price of this single boat but what is average list price of comparable boats.that is the competition to the seller and the alternative for the buyer. Comparable ideally means same model, similarly equipped, similar condition and within the same region. Using Florida pricing for a SoCal boat is not comparable unless you adjust for the cost,risk and time to deliver it.
Offer 20% off an be prepared to negotiate.
Option#2
Decide what is the max you will pay for the boat (and feel it was a fair deal) and offer 10-15%% less and negotiate from there.

In any event I have usually included a "deductible allowance" for survey items to let the seller know I am not planning to nickel and dime them. For example on an $800k boat buyer would cover any problems found at survey totalling less than $30k. So even if the offer is aggressively low it will not get even worse for the seller after the survey unless there are really serious problems.

All of this is influenced by how badly you want the boat and how anxious the seller is to get rid of it. As mentioned if you do your homework and have a good broker you can usually know about where the parties are likely to meet on price.

Thanks.

 

[mvweebles]

Is it common for a buyer to use a broker, as well as the seller?

Same as real estate. Common for a buyer to develop a relationship with a broker who will show them several boats, perhaps suggesting alternatives. If you decide to make an offer that is listed with another broker, agents/brokerages split the commission.

 

[Nomad Willy]

Open d,
Of the options you gave ... 20%.

If all the variables are typical and usually they aren’t.
That’s why you got the answers you got.

 

[boatpoker]

I don't understand why nobody can just offer their opinion. Say 10-15% or 15-20%. I am not asking for a perfectly-accurate answer, but just a ball-park answer from what your experience is. Of course there are lots of variable, of course you can't give a "for certain" answer, but at least a ball-park answer would be do-able.

Been in the business a long time, been involved with thousands of sales ... no such thing as a reasonable "ballpark" answer to this question.

I've only sold three boats. All three were sold within one week at asking.

 

[DDW]

You can probably offer 20% under and not offend anyone enough not to speak to you again. The danger in doing that blindly is that it may be accepted - for a boat that is worth 50% less. That's why you are getting the advice being offered. First you need to value the boat, ignoring the asking price. Second, compare that to the asking price.

 

[Jimmy and the Twins]

I don't understand why nobody can just offer their opinion. Say 10-15% or 15-20%. I am not asking for a perfectly-accurate answer, but just a ball-park answer from what your experience is. Of course there are lots of variable, of course you can't give a "for certain" answer, but at least a ball-park answer would be do-able.

It is my initial position to make an offer with a 20% discount and go from there and let the seller respond. Is that unreasonable under typical conditions?

So if a boat with a value of 100K is offered at 95 for a quick sale, you are going to offer 76? Really. or say the 100K value boat is offered 130, you would offer 104.

It is said that many times the Cheapest/ best valued boat is the one that costs the most.

If I offer for sale a boat below fair value and you come in with a tire kicker discount, I will reduce or increase the price by $1.
I have done just that, and sale and survey was completed in 4 weeks to a Knowledgeable individual and we were both happy.

 

[Circumnavigator]

The reason that no one can give you the definitive answer that you want is that, as several have said, "it depends". If the boat has been on the market for six months with no reduction in price, then an offer of 75-80% of the asking price might be the right thing to do. On the other hand, if the boat just went on the market, you might go 95% of the asking price, all other things being equal. That's true even if your research shows that similar boats are selling for less than the asking price. The only thing you can do then is tell the broker or seller that and wait until they get realistic.


Brokers and surveyors tell me that 2020 was their busiest year ever. People have figured out that a boat is a safe place, even if you're just sitting in the slip. That being the case, big reductions from the asking price are unlikely until the boat has been sitting for a while.



Jim

 

[Open-d]

Open d,
Of the options you gave ... 20%.

If all the variables are typical and usually they aren’t.
That’s why you got the answers you got.

So from what you say, a typical listing for a reasonably "priced" vessel would garner a starting offer approx 80% of asking price?

 

[Open-d]

You can probably offer 20% under and not offend anyone enough not to speak to you again. The danger in doing that blindly is that it may be accepted - for a boat that is worth 50% less. That's why you are getting the advice being offered. First you need to value the boat, ignoring the asking price. Second, compare that to the asking price.

Yes, of course. My question is, after all that is done, a 20% discounted offer is "reasonable".

 

[Group9]

A lot of it is the buyer's position. We looked at a boat in 2009 that was listed for $130,000, and we liked it but we didn't want to pay over a $100,000/ I thought it really was worth close to $130,000 and the seller was really nice and I just didn't want to offend him with an offer he wouldn't accept.

Three or four months later, in April 2010, we hadn't see anything else we like nearly as much, and went to look at it again. He had dropped the price to $90,000. You have to remember the housing and banking crash that had just occurred.

I asked him if he would take $80,000 and he said yes, and we bought the boat.

A week later, the BP oil spill occurred and the prices really dropped in the area.

So, like a lot of things, it depends.

 

[kthoennes]

I know it can be frustrating when you don't get the answer you want, but you're looking for clarity that doesn't exist. Boats are not houses that have some fixed approximate value with dozens of comps in the same neighborhood. Somebody could tell you that for all the boat sales over the entire United States the selling price was 86.4503% of asking, and some of the posters here have given you at least a percentage range, and that could very well be accurate for them, but I don't know that really tells you anything useful for X boat in X location. You're getting a chorus of "it depends" answers because that's the prevailing answer. But no point debating it really, if you're keen on getting a percentage.

 

[mvweebles]

I know it can be frustrating when you don't get the answer you want, but you're looking for clarity that doesn't exist. Boats are not houses that have some fixed approximate value with dozens of comps in the same neighborhood. Somebody could tell you that for all the boat sales over the entire United States the selling price was 86.4503% of asking, and some of the posters here have given you at least a percentage range, and that could very well be accurate for them, but I don't know that really tells you anything useful for X boat in X location. You're getting a chorus of "it depends" answers because that's the prevailing answer. But no point debating it really, if you're keen on getting a percentage.

I agree with this. But I believe it argues for a number, not against.

If your budget is $100k, you have a reasonable expectation of looking at boats about $120k or so and end up pretty close to $100k selling price.

You have to start somewhere. Market has changed with covid to more of a sellers market, but traditionally, a lot of deals got done at 85% of asking price +/- a 5 or so points. Not all sellers play the game. But you gotta start somewhere. That's the exam question from the OP. Saying "it depends" is a cop out. Not helpful.

 

[Leatherneck]

Open-d,
Circumstances are always changing. Covid pushing prices higher, buyer health issues resulting in increased motivation to sell, etc. I was lucky to get my trawler in January before prices went up. It was priced at about the average for its type, model, year, condition but the seller had some health issues, had bought a new boat, was paying two slip fees. I ended up with a 39% discount to its asking price. She has run well this past year including a trip up the ICW from Florida to Maryland with no significant problems and I am completely happy with her. So, I would caution to not use some generalized calculation for a reasonable offer price. You need to consider all of the factors to include the buyer's motivation to sell and your budget.

 

[mvweebles]

QUOTE: "You need to consider all of the factors to include the buyer's motivation to sell and your budget."

So where do you start? How does a seller typically set their asking price?

This isn't that difficult. Most sellers know they won't get a full price offer. So they are prepared for something less. That's the OPs question. Not are they rational, do they have have stars in their eyes. Not is the boat worth it. Not whether there are exceptions and distress sales. Just how much cushion do most buyers put into their asking price.

Its a good question. A simple one.

If say most plan on 10% haircut at worst. But can be pushed further if needed. 20% discount to asking is a decent offer, but could piss off a few sellers.

Peter

 

[firehoser75]

If all the OP wants is a "wild a>>" guess of where to start, then I guess 20% is as good a place to start as any??
However, it has been pointed out by many posters that there is a bit more to it than that.
As an example:
Boat model A is the only one for sale (of that model) within 1000 miles of your location. It has just come on the market and is a boat (type) that is very much in demand (right now). The seller has kept the boat in great condition, and is offering it (based on past sales) at a very competitive price hoping for a quick sale for health reasons. Starting off with an offer at 20% asking in this case could cost you the boat, as another buyer could offer more before you could finish negotiations (or even get started if the seller took offence to what he considers under these circumstances to be a "low ball" (insulting) offer).
If, as the buyer, you are prepared to miss out on good boats, and are only looking for the "best price", then maybe start even lower???
I do agree that you have to have some method to figure out if a boat is within your (actual) budget, I would investigate boats that were within 110-125% of my budget depending on current market conditions. Also, I would obtain a "buyer's broker" to give me more "refined" advice as to the current market and info on specific boats, but I would have to feel that I could trust that advice so time investigating the broker may be needed.

I think a fair amount of time and effort is usually needed to end up with the "best boat" for you at a "fair" price. Much like most things.

 

[mvweebles]

If all the OP wants is a "wild a>>" guess of where to start, then I guess 20% is as good a place to start as any??
However, it has been pointed out by many posters that there is a bit more to it than that.
As an example:
Boat model A is the only one for sale (of that model) within 1000 miles of your location. It has just come on the market and is a boat (type) that is very much in demand (right now). The seller has kept the boat in great condition, and is offering it (based on past sales) at a very competitive price hoping for a quick sale for health reasons. Starting off with an offer at 20% asking in this case could cost you the boat, as another buyer could offer more before you could finish negotiations (or even get started if the seller took offence to what he considers under these circumstances to be a "low ball" (insulting) offer).
If, as the buyer, you are prepared to miss out on good boats, and are only looking for the "best price", then maybe start even lower???
I do agree that you have to have some method to figure out if a boat is within your (actual) budget, I would investigate boats that were within 110-125% of my budget depending on current market conditions. Also, I would obtain a "buyer's broker" to give me more "refined" advice as to the current market and info on specific boats, but I would have to feel that I could trust that advice so time investigating the broker may be needed.

I think a fair amount of time and effort is usually needed to end up with the "best boat" for you at a "fair" price. Much like most things.

I don't disagree. My point is y'all are approaching this from the buyers perspective. I understood the question to be what a seller would consider. In other words, what their pricing rationale may be. That is roughly predictable - they don't set a price thinking "gee, if like $200k, but if someone came along with $100k, I'd snatch it in a heartbeat." It really doesn't depend. Sellers set the price knowing they'll have to back off a bit. Question is how much?

To listen to all the "it depends" on a thread like this, the Yachtworld filter on price is more or less meaningless - it really depends.

 

[mvweebles]

Whether the boat is overpriced or underpriced, most (not all) sellers will entertain an offer of 10%. You might piss them off at 20% reduction, but probably not irreparably.

Right now, in sellers market, that is different. But there's still a deadband of whats in the sellers mind. And what their broker can massage.

This isn't about the value of the boat. That's entirely up to the buyer. Exam question is how much cushion a seller builds in to their asking price.

 

[O C Diver]

If you're the buyer, figure out what you can realistically afford to pay. Remember, two boats that sell for $100K don't necessarily have the same annual cost between maintenance, insurance, and operating expenses. If you want to look at boats above what you can afford, remember you need to get back to or below the line. While I try not to offend people, you need to probably offer below the line, so that you can accept a counter.

If money isn't an issue, figure out what you are willing to spend and follow the above procedure.

If you've already fallen in love with the boat and are trying to figure out what you can get it for, you're screwed. Rule number one of boat buying is don't fall in love until after you own it.

Ted

 

[BruceK]

A lawyers analogy: It was said that "Equity" was determined by the length of the Chancellor`s foot. In the same way, price setting depends on the sellers non objective view of value, and maybe the brokers. Rules of thumb are tough to discern. Getting to know values or even asking prices, for particular boat models will help.
I bought my first powerboat at 50% of the ask, not because I got a great deal but because it was overpriced to the point all the advt meant was: "it`s for sale".
Look at a price, esp. where there is a broker. Think where the owner might be hoping to end up after brokerage, and what might be the fallback after that. If it`s priced at 120K, that might easily mean the owner wants 100K clear. Put yourself in the Sellers position and think like he might. You`ll be better informed, and gain an appreciation of what happens "on the other side", which might help your negotiation outcome.

 

[DDW]

If it`s priced at 120K, that might easily mean the owner wants 100K clear. Put yourself in the Sellers position and think like he might.

Keeping in mind that if it is priced at 120K, and the seller accepts an offer of 100K, he is actually going to clear 90K, as broker's commissions are typically 10% paid from the proceeds.

 

[BruceK]

Keeping in mind that if it is priced at 120K, and the seller accepts an offer of 100K, he is actually going to clear 90K, as broker's commissions are typically 10% paid from the proceeds.

You are right. I was working on: ask 120K, accept 110K(gross),10K to broker, 100K to seller.
In Workers Comp. settlements there could be deductions from the gross amount(in that particular Court no legal fees got deducted); a colleague said he could recognize the question often addressed via an interpreter: "How much $ clear to me?", in 10 different languages. It`s the "clear" figure that matters, it`s what sellers will have in mind.

 

[Art]

My goodness Open-D... You have gotten many good suggestions. Many ways to maneuver. You ever purchased a boat before? You understand / know much about boats??

 

[Jorgeinseal]

Yes, 10% as I wanted to ensure the offer gets accepted and I am 1st in line and then we can hammer out the details later....I just made another offer @ 94% of asking with a 48 hour decision to accept and still waiting to hear.

 

[TweetyBird]

Depends
I have seen boats start at $800k and sell for $100k

Hahahaha, that's the kind of boat I'm looking for.

 

[Steel N Time]

You don’t know what’s going on for the seller and what they might take. It also depends on what they are asking and where it’s located... If the boat is East and you’re on the West coast, the markets are different and you will have hefty moving costs to consider in you offer...

Couple years ago there was a decent looking boat asking price of $200k.... Owner had a few boats and was in restaurant business and needed to sell one... moorage is $1000 per month, so he had to consider any and all offers... We offered 90k and he accepted... After mechanical survey the mechanic had some concerns about wiring, lack of ECM data, heat indication and exhaust leaks for QSM11 motors, so we cancelled....

Found another boat that had started at $400k then down, then down, then down,.... had been on the market for 2 years, had a couple sale fails.... asking price was $240k.... We bought it for $85k.... now into it more than double that with one rebuild and some repairs....

There are two examples where they accepted far less than asking... older boats are more likely to take less, the market gets limited and they need work, so the buyer has to beware of what they are buying and the seller needs to consider how long until another buyer might come along....

Higher priced, newer vessels will likely hold a better value and won’t require as much potential repair...

You should do your do diligence on each vessel and offer differently based upon your market research and potential repairs. Don’t worry about asking price as much as “what’s it worth to you” based on market, location, repairs, etc... Don't worry about offending someone, if they are asking too much then that is on them.. Just make sure you research values and sales not asking prices...

 

[Rum Runner]

I know that this might be a difficult questions to answer, but, typically, in a boat listing for, say, $400K, how much room for negotiations is built into that price - typically. 10%, 15%, 20%?

As a marine consultant I have been successful in guiding people through the process, and the one thing that I stress is "does it hit you in the heart"? If you are buying the boat to make money, don't buy it. Buy the boat because you LOVE IT and can see many many years of happy cruising ahead. If all you are interested in is how much you paid, don't buy it, you will regret every minute of ownership.

Each boat is different so putting a percentage on value for "room to negotiate" isn't possible. Pay what you think its worth to you and all parties will be happy. But after making an agreement, it must be subject to survey, sea trial mechanical survey and so on. At that time you can ask to reduce the price depending on what needs doing. But remember, if you want a new boat, go and buy one.

 

[HuffinandPuffin]

I don't understand why nobody can just offer their opinion. Say 10-15% or 15-20%. I am not asking for a perfectly-accurate answer, but just a ball-park answer from what your experience is. Of course there are lots of variable, of course you can't give a "for certain" answer, but at least a ball-park answer would be do-able.

It is my initial position to make an offer with a 20% discount and go from there and let the seller respond. Is that unreasonable under typical conditions?

I've wondered the same thing. But really, just make whatever offer you want to make. A low offer is not against the law. The worst that can happen is they say no.